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| ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-------------------------------------------------------------------------------------------|

| Delaware                 | 52-2107911                           |
|--------------------------|--------------------------------------|
| (State of incorporation) | (I.R.S. Employer Identification No.) |

| Large accelerated filer | ý |   | Accelerated filer         | o |
|-------------------------|--------|--------|---------------------------|---|
| Non-accelerated filer   | o      |   | Smaller reporting company | o |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Page   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | PART I – FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Financial Statements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Consolidated Condensed Balance Sheets at June 30, 2010 and December 31, 2009 (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 4      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Consolidated Condensed Statements of Operations for the Three and Six Months Ended June 30, 2010 and 2009 (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 5      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009 (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 6      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Notes to Consolidated Condensed Financial Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 7      |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 18     |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Quantitative and Qualitative Disclosures about Market Risk                                                                                                               | 44     |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 44     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | PART II – OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Legal Proceedings                                                                                                                                                        | 45     |
| Item 1A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Risk Factors                                                                                                                                                             | 45     |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                              | 54     |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Submission of Matters to a Vote of Security Holders                                                                                                                      | 54     |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Exhibits                                                                                                                                                                 | 55     |
| Signature                                                                                                                                        | 56                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit Index                                                                                                                               | 57                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | June 30,2010 |    |   | December 31,2009 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         |    |   |             |   |
| Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |    |   |             |   |
| Cash and cash equivalents                                                                                                                                            |   | $            | 207.5   |   |             | $      | 131.3 |   |
| Accounts receivable, net                                                                                                                                             |   |         | 121.1   |   |             |   | 191.4 |   |
| Inventories                                                                                                                                                          |   |         | 1,359.8 |   |             |   | 1,301.2 |   |
| Deferred income taxes                                                                                                                                                |   |         | 43.4    |   |             |   | 48.6 |   |
| Deferred costs associated with deferred revenue                                                                                                                      |   |         | 286.8   |   |             |   | 244.4 |   |
| Other current assets                                                                                                                                                 |   |         | 68.1    |   |             |   | 52.7 |   |
| Total Current Assets                                                                                                                                                                |   |         | 2,086.7 |   |             |   | 1,969.6 |   |
| Property, Plant and Equipment, net                                                                                                                    |   |         | 1,170.0 |   |             |   | 1,115.1 |   |
| Other Long-Term Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         |    |   |             |   |   |   |
| Deferred income taxes                                                                                                                                                |   |         | 259.0   |   |             |   | 270.3 |   |
| Deposits for surety bonds                                                                                                                                            |   |         | 155.3   |   |             |   | 158.3 |   |
| Deferred financing costs, net                                                                                                                                        |   |         | 12.7    |   |             |   | 12.0 |   |
| Goodwill                                                                                                                                                             |   |         | 6.8     |   |             |   | 6.8 |   |
| Total Other Long-Term Assets                                                                                                                                                        |   |         | 433.8   |   |             |   | 447.4 |   |
| Total Assets                                                                                                                                          |   | $            | 3,690.5 |   |             | $      | 3,532.1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         |    |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         |    |   |             |   |   |   |
| Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         |    |   |             |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                             |   | $            | 138.1   |   |             | $      | 153.4 |   |
| Payables under Russian Contract                                                                                                                                      |   |         | 188.6   |   |             |   | 134.8 |   |
| Inventories owed to customers and suppliers                                                                                                                          |   |         | 572.3   |   |             |   | 469.4 |   |
| Deferred revenue and advances from customers                                                                                                                         |   |         | 379.8   |   |             |   | 325.0 |   |
| Total Current Liabilities                                                                                                                                                           |   |         | 1,278.8 |   |             |   | 1,082.6 |   |
| Long-Term Debt                                                                                                                                        |   |         | 575.0   |   |             |   | 575.0 |   |
| Other Long-Term Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         |    |   |             |   |   |   |
| Depleted uranium disposition                                                                                                                                         |   |         | 115.0   |   |             |   | 155.6 |   |
| Postretirement health and life benefit obligations                                                                                                                   |   |         | 172.2   |   |             |   | 168.9 |   |
| Pension benefit liabilities                                                                                                                                          |   |         | 179.9   |   |             |   | 176.6 |   |
| Other liabilities                                                                                                                                                    |   |         | 88.9    |   |             |   | 97.8 |   |
| Total Other Long-Term Liabilities                                                                                                                                                   |   |         | 556.0   |   |             |   | 598.9 |   |
| Commitments and Contingencies (Note 11)                                                                                                               |   |         |    |   |             |   |   |   |
| Stockholders’ Equity                                                                                                                            |   |         | 1,280.7 |   |             |   | 1,275.6 |   |
| Total Liabilities and Stockholders’ Equity                                                                                                      |   | $            | 3,690.5 |   |             | $      | 3,532.1 |   |

----

|                                           |   | Three Months Ended June 30, |       |   | Six Months Ended June 30, |   |
|------------------------------------------------|--------|----------------------------------|------------|--------|--------------------------------|--------|
|                                           |   | 2010                             |       |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Revenue:                                       |   |                             |       |   |                           |   |   |   |   |   |   |   |
| Separative work units                          |   | $                                | 331.0      |   |                           | $      | 371.3 |   |   | $ | 597.6 |   |   | $ | 799.2 |   |
| Uranium                                        |   |                             | 69.6       |   |                           |   | 95.4 |   |   |   | 85.2 |   |   |   | 124.0 |   |
| U.S. government contracts and other            |   |                             | 59.1       |   |                           |   | 47.6 |   |   |   | 121.6 |   |   |   |  96.7 |   |
| Total revenue                                  |   |                             | 459.7      |   |                           |   | 514.3 |   |   |   | 804.4 |   |   |   | 1,019.9 |   |
| Cost of sales:                                 |   |                             |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Separative work units and uranium              |   |                             | 358.6      |   |                           |   | 391.9 |   |   |   | 625.8 |   |   |   | 806.8 |   |
| U.S. government contracts and other            |   |                             |  57.0 |   |                           |   |  45.0 |   |   |   | 107.8 |   |   |   |  93.5 |   |
| Total cost of sales                            |   |                             | 415.6      |   |                           |   | 436.9 |   |   |   | 733.6 |   |   |   | 900.3 |   |
| Gross profit                                   |   |                             | 44.1       |   |                           |   | 77.4 |   |   |   | 70.8 |   |   |   | 119.6 |   |
| Advanced technology costs                      |   |                             | 26.0       |   |                           |   | 30.7 |   |   |   | 51.7 |   |   |   | 62.1 |   |
| Selling, general and administrative            |   |                             | 14.3       |   |                           |   | 16.6 |   |   |   | 29.4 |   |   |   | 31.1 |   |
| Other (income)                                 |   |                             | (10.3      | )      |                           |   | - |   |   |   | (20.0 | ) |   |   | - |   |
| Operating income                               |   |                             | 14.1       |   |                           |   | 30.1 |   |   |   | 9.7 |   |   |   | 26.4 |   |
| Interest expense                               |   |                             | 0.1        |   |                           |   | 0.3 |   |   |   | 0.1 |   |   |   | 0.8 |   |
| Interest (income)                              |   |                             |  (0.1 | )      |                           |   |  (0.4 | ) |   |   | (0.2 | ) |   |   | (1.0 | ) |
| Income before income taxes                     |   |                             | 14.1       |   |                           |   | 30.2 |   |   |   | 9.8 |   |   |   | 26.6 |   |
| Provision for income taxes                     |   |                             | 6.9        |   |                           |   | 12.9 |   |   |   | 12.3 |   |   |   | 11.4 |   |
| Net income (loss)                              |   | $                                | 7.2        |   |                           | $      | 17.3 |   |   | $ | (2.5 | ) |   | $ | 15.2 |   |
| Net income (loss) per share – basic      |   | $                                | .06        |   |                           | $      | .16 |   |   | $ | (.02 | ) |   | $ | .14 |   |
| Net income (loss) per share – diluted    |   | $                                | .04        |   |                           | $      | .11 |   |   | $ | (.02 | ) |   | $ | .10 |   |
| Weighted-average number of shares outstanding: |   |                             |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   |                             | 112.9      |   |                           |   | 111.5 |   |   |   | 112.3 |   |   |   | 111.1 |   |
| Diluted                                        |   |                             | 161.4      |   |                           |   | 160.3 |   |   |   | 112.3 |   |   |   | 159.8 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Six Months EndedJune 30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2010                     |   |   | 2009 |   |
| Cash Flows from Operating Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |   |   |   |   |
| Net income (loss)                                                                                                                                                  |   | $                        | (2.5   | ) |   | $ | 15.2 |   |
| Adjustments to reconcile net income (loss) to net cash provided by (used in)operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                     |   |   |   |   |   |   |
| Depreciation and amortization                                                                                                                                                                              |   |                     | 19.5   |   |   |   | 14.7 |   |
| Deferred income taxes                                                                                                                                                                                      |   |                     | 14.5   |   |   |   | (8.1 | ) |
| Other non-cash income on release of disposal obligation                                                                                                                                                         |   |                     | (20.0  | ) |   |   | - |   |
| Changes in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     |   |   |   |   |   |   |
| Accounts receivable – (increase) decrease                                                                                                                                                                                |   |                     | 70.3   |   |   |   | (77.3 | ) |
| Inventories – decrease                                                                                                                                                                                                   |   |                     | 44.3   |   |   |   | 109.7 |   |
| Payables under Russian Contract – increase                                                                                                                                                                               |   |                     | 53.8   |   |   |   | 136.7 |   |
| Deferred revenue, net of deferred costs – increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     | 31.6   |   |   |   | (15.5 | ) |
| Accrued depleted uranium disposition – increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                     | (40.6  | ) |   |   | 23.5 |   |
| Accounts payable and other liabilities – increase (decrease)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                     | (3.0   | ) |   |   | 10.4 |   |
| Other, net                                                                                                                                                                                                                     |   |                     | 5.3    |   |   |   | 12.4 |   |
| Net Cash Provided by (Used in) Operating Activities                                                                                                                |   |                     | 173.2  |   |   |   | 221.7 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |   |   |   |   |   |   |
| Cash Flows Used in Investing Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     |   |   |   |   |   |   |
| Capital expenditures                                                                                                                                               |   |                     | (87.9  | ) |   |   | (257.8 | ) |
| Deposits for surety bonds – (increase) decrease                                                                                                              |   |                     | 3.0    |   |   |   | (38.2 | ) |
| Net Cash (Used in) Investing Activities                                                                                                                            |   |                     | (84.9  | ) |   |   | (296.0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |   |   |   |   |   |   |
| Cash Flows Used in Financing Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     |   |   |   |   |   |   |
| Borrowings under credit facility                                                                                                                                   |   |                     | 38.2   |   |   |   | - |   |
| Repayments under credit facility                                                                                                                                   |   |                     | (38.2  | ) |   |   | - |   |
| Repayment and repurchases of senior notes                                                                                                                          |   |                     | -      |   |   |   | (95.7 | ) |
| Payments for deferred financing costs                                                                                                                              |   |                     | (9.6   | ) |   |   | - |   |
| Common stock issued (purchased), net                                                                                                                               |   |                     | (2.5   | ) |   |   | (0.8 | ) |
| Net Cash (Used in) Financing Activities                                                                                                                            |   |                     | (12.1  | ) |   |   | (96.5 | ) |
| Net Increase (Decrease)                                                                                                                                            |   |                     | 76.2   |   |   |   | (170.8 | ) |
| Cash and Cash Equivalents at Beginning of Period                                                                                                                   |   |                     | 131.3  |   |   |   | 248.5 |   |
| Cash and Cash Equivalents at End of Period                                                                                                                         |   | $                        | 207.5  |   |   | $ | 77.7 |   |
| Supplemental Cash Flow Information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                     |   |   |   |   |   |   |
| Interest paid, net of amount capitalized                                                                                                                                               |   | $                        | -      |   |   | $ | 1.9 |   |
| Income taxes paid, net of refunds                                                                                                                                                      |   |                     | 15.5   |   |   |   | 4.3 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | June 30,2010 |    |   | December 31,2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | (millions)   |    |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         |    |   |             |   |
| Separative work units                                                                     |   | $            | 878.1   |   |             | $      | 805.1 |   |
| Uranium                                                                                   |   |         | 468.9   |   |             |   | 482.1 |   |
| Materials and supplies                                                                    |   |         | 12.8    |   |             |   | 14.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 1,359.8 |   |             |   | 1,301.2 |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         |    |   |             |   |   |   |
| Inventories owed to customers and suppliers                                                                                                                                                                                                                                                                                                                                                                                              |   |         | (572.3  | )      |             |   | (469.4 | ) |
| Inventories, net                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $            | 787.5   |   |             | $      | 831.8 |   |

----

|                                                                                                                                                                                                                                                                               |   | December 31,2009 |    |   | Capital Expenditures(Depreciation) |   |      | TransfersandRetirements |   |   | June 30,2010 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|------------------------------------|--------|-----------|-------------------------|--------|--------|--------------|--------|
| Construction work in progress                                                                                                                                                                                                                                                      |   | $                | 991.4   |   |                               | $      | 68.8      |                    |   | $      | (7.2         | )      |   | $ | 1,053.0 |   |
| Leasehold improvements                                           |   |             | 182.6   |   |                               |   | -         |                    |   |   | 2.7          |   |   |   | 185.3 |   |
| Machinery and equipment                                                                                                                                                                                                                                                            |   |             | 260.1   |   |                               |   |  2.3 |                    |   |   | 4.4          |   |   |   | 266.8 |   |
|                                                                                                                                                                                                                                                                               |   |             | 1,434.1 |   |                               |   | 71.1      |                    |   |   | (0.1         | )      |   |   | 1,505.1 |   |
| Accumulated depreciation and amortization                                                                                                                                                                                                                                          |   |             | (319.0  | )      |                               |   | (16.2     | )                       |   |   | 0.1          |   |   |   | (335.1 | ) |
|                                                                                                                                                                                                                                                                               |   | $                | 1,115.1 |   |                               | $      | 54.9      |                    |   | $      | -            |   |   | $ | 1,170.0 |   |

----

|                    |   | June 30,2010 |       |   | December 31,2009 |   |
|-------------------------|--------|--------------|------------|--------|------------------|--------|
|                    |   | (millions)   |       |
| Deferred revenue        |   | $            | 344.8      |   |             | $      | 301.9 |   |
| Advances from customers |   |         |  35.0 |   |             |   | 23.1 |   |
|                    |   | $            | 379.8      |   |             | $      | 325.0 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | June 30,   |   |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2010       |   |   | 2009         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (millions) |   |
| Short-term borrowings                                                                     |   | $          | -      |   |         | $      | - |   |
| Letters of credit                                                                         |   |       | 37.9   |   |         |   | 45.4 |   |
| Available credit                                                                          |   |       | 187.1  |   |         |   | 295.5 |   |

----

|                                                                                                  |   | CommonStock,Par Value$.10 perShare |   |   | Excess ofCapital overPar Value |   |    |  RetainedEarnings |   |   |    TreasuryStock |   |   | AccumulatedOther Compre-hensive Income (Loss) |    |   |  TotalStockholders’ Equity |   |   |  Comprehensive Income (Loss) |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|--------------------------------|--------|---------|------------------------|--------|--------|---------------------------------|--------|--------|-----------------------------------------------|---------|--------|---------------------------------------|--------|--------|-----------------------------------|--------|
| Balance at December 31, 2009                                                                          |   | $                                  | 12.3   |   |                           | $      | 1,179.6 |                   |   | $      | 322.4                           |   |   | $                                             | (71.3   | )      |                                  | $      | (167.4 | )                                 |   | $ | 1,275.6 |   |   |   |   |
| Restricted and other stock issued, net                                                                |   |                               | -      |   |                           |   | (9.6    | )                      |   |   | -                               |   |   |                                          | 13.2    |   |                                  |   | -      |                              |   |   | 3.6 |   |   |   | - |   |
| Amortization of actuarial losses and prior service costs (credits), net of income tax of $2.0 million |   |                               | -      |   |                           |   | -       |                   |   |   | -                               |   |   |                                          | -       |   |                                  |   | 4.0    |                              |   |   | 4.0 |   |   |   | 4.0 |   |
| Net (loss)                                                                                            |   |                               | -      |   |                           |   | -       |                   |   |   | (2.5                            | )      |   |                                          |  - |   |                                  |   | -      |                              |   |   | (2.5 | ) |   |   | (2.5 | ) |
| Balance at June 30, 2010                                                                              |   | $                                  | 12.3   |   |                           | $      | 1,170.0 |                   |   | $      | 319.9                           |   |   | $                                             | (58.1   | )      |                                  | $      | (163.4 | )                                 |   | $ | 1,280.7 |   |   | $ | 1.5 |   |

|                                         |   | Defined Benefit Pension Plans   |   |   |  Postretirement Health and Life Benefits Plans |   |
|----------------------------------------------|--------|---------------------------------|--------|--------|-----------------------------------------------------|--------|
|                                         |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30,                            |   |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
|                                         |   | 2010                            |   |   | 2009                                                |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
| Service costs                                |   | $                               | 4.9    |   |                                                | $      | 4.6 |   |   | $ | 9.7 |   |   | $ | 9.3 |   |   | $ | 1.3 |   |   | $ | 1.1 |   |   | $ | 2.5 |   |   | $ | 2.3 |   |
| Interest costs                               |   |                            | 12.2   |   |                                                |   | 11.9 |   |   |   | 24.4 |   |   |   | 23.8 |   |   |   | 2.9 |   |   |   | 3.1 |   |   |   | 5.9 |   |   |   | 6.3 |   |
| Expected return on plan assets(gains)        |   |                            | (12.3  | )      |                                                |   | (10.6 | ) |   |   | (24.4 | ) |   |   | (21.3 | ) |   |   | (0.9 | ) |   |   | (0.7 | ) |   |   | (1.8 | ) |   |   | (1.5 | ) |
| Amortization of prior service costs(credits) |   |                            | 0.5    |   |                                                |   | 0.4 |   |   |   | 0.9 |   |   |   | 0.8 |   |   |   | (2.1 | ) |   |   | (3.6 | ) |   |   | (4.2 | ) |   |   | (7.2 | ) |
| Amortization of actuarial losses             |   |                            | 4.0    |   |                                                |   | 6.0 |   |   |   | 8.0 |   |   |   | 12.0 |   |   |   | 0.6 |   |   |   | 1.1 |   |   |   | 1.3 |   |   |   | 2.1 |   |
| Net benefit costs                            |   | $                               | 9.3    |   |                                                | $      | 12.3 |   |   | $ | 18.6 |   |   | $ | 24.6 |   |   | $ | 1.8 |   |   | $ | 1.0 |   |   | $ | 3.7 |   |   | $ | 2.0 |   |

----

|                                                    |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|---------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                    |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
|                                                    |   | (millions)                  |   |
| Total stock-based compensation costs:                   |   |                        |   |   |                      |   |   |   |   |   |   |   |
| Restricted stock and restricted stock units             |   | $                           | 2.0    |   |                      | $      | 2.6 |   |   | $ | 4.9 |   |   | $ | 4.6 |   |
| Stock options, performance awards and other             |   |                        | 0.4    |   |                      |   | 0.3 |   |   |   | 1.1 |   |   |   | 1.0 |   |
| Less: costs capitalized as part of inventory            |   |                        | (0.1   | )      |                      |   | (0.1 | ) |   |   | (0.2 | ) |   |   | (0.2 | ) |
| Expense included in selling, general and administrative |   | $                           | 2.3    |   |                      | $      | 2.8 |   |   | $ | 5.8 |   |   | $ | 5.4 |   |
|   Total after-tax expense                          |   | $                           | 1.4    |   |                      | $      | 1.8 |   |   | $ | 3.7 |   |   | $ | 3.5 |   |

|                                   | Three Months Ended June 30, | Six Months Ended June 30, |
|----------------------------------------|-----------------------------|---------------------------|
|                                   | 2010                        | 2009                      | 2010 | 2009 |
| Risk-free interest rate                | -                           | -                         | 1.4% | 1.4% |
| Expected dividend yield                | -                           | -                         | - | - |
| Expected volatility                    | -                           | -                         | 72% | 65% |
| Expected option life                   | -                           | -                         | 4 years | 3.8 years |
| Weighted-average grant date fair value | -                           | -                         | $2.81 | $1.81 |
| Options granted                        | 0                           | 0                         | 766,050 | 1,091,300 |

----

|                                             |   | Three Months Ended  June 30,  |    |   | Six Months Ended  June 30, |   |
|--------------------------------------------------|--------|---------------------------------------------------|---------|--------|-------------------------------------------|--------|
|                                             |   | 2010                                              |    |   | 2009                                      |   |   | 2010 |   |   | 2009 |   |
|                                             |   | (in millions)                                     |    |
| Numerator:                                       |   |                                              |    |   |                                      |   |   |   |   |   |   |   |
| Net income (loss)                                |   | $                                                 | 7.2     |   |                                      | $      | 17.3 |   |   | $ | (2.5 | ) |   | $ | 15.2 |   |
| Net interest expense on convertible notes (a)    |   |                                              |  - |   |                                      |   |  - |   |   | (b) |   |   |   | 0.2 |   |
| Net income (loss) if-converted                   |   |                                              | 7.2     |   |                                      |   | 17.3 |   |   |   | (2.5 | ) |   |   | 15.4 |   |
|                                             |   |                                              |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                     |   |                                              |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares                   |   |                                              | 114.9   |   |                                      |   | 113.0 |   |   |   | 114.3 |   |   |   | 112.5 |   |
| Less: Weighted average unvested restricted stock |   |                                              | 2.0     |   |                                      |   | 1.5 |   |   |   | 2.0 |   |   |   | 1.4 |   |
| Denominator for basic calculation                |   |                                              | 112.9   |   |                                      |   | 111.5 |   |   |   | 112.3 |   |   |   | 111.1 |   |
|                                             |   |                                              |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average effect of dilutive securities:  |   |                                              |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Convertible notes                                |   |                                              | 48.1    |   |                                      |   | 48.1 |   |   | (b) |   |   |   | 48.1 |   |
| Stock compensation awards                        |   |                                              | 0.4     |   |                                      |   | 0.7 |   |   | (b) |   |   |   | 0.6 |   |
| Denominator for diluted calculation              |   |                                              | 161.4   |   |                                      |   | 160.3 |   |   |   | 112.3 |   |   |   | 159.8 |   |
|                                             |   |                                              |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per share – basic        |   | $                                                 | .06     |   |                                      | $      | .16 |   |   | $ | (.02 | ) |   | $ | .14 |   |
| Net income (loss) per share – diluted      |   | $                                                 | .04     |   |                                      | $      | .11 |   |   | $           (.02) (b) |   |   | $ | .10 |   |

| (a)   | Interest expense on convertible notes net of amount capitalized and net of tax. |
|-----------------|---------------------------------------------------------------------------------|

| (b)   | No dilutive effect of convertible notes or stock compensation awards is recognized in a period in which a net loss has occurred.  Net interest expense on convertible notes was less than .01 million and weighted average number of shares for the convertible notes and stock compensation awards was 48.1 million and 0.4 million, respectively. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             | Three Months Ended  June 30,    | Six Months Ended  June 30,  |
|--------------------------------------------------|---------------------------------------------------------------|-------------------------------------------------|
|                                             | 2010                                                          | 2009                                            | 2010 | 2009 |
| Options excluded from diluted earnings per share | 1.8                                                           | 1.9                                             | 2.6 | 1.9 |
| Exercise price of excluded options               | $5.86 to $16.90                                               | $5.86 to $16.90                                 | $5.00 to $16.90 | $5.86 to $16.90 |

----

----

----

----

|                                |   | Three Months Ended  June 30, |   |   | Six Months Ended June 30, |   |
|-------------------------------------|--------|----------------------------------------|--------|--------|--------------------------------|--------|
|                                |   | 2010                                   |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                |   | (millions)                             |   |
| Revenue                             |   |                                   |   |   |                           |   |   |   |   |   |   |   |
| LEU segment:                        |   |                                   |   |   |                           |   |   |   |   |   |   |   |
| Separative work units               |   | $                                      | 331.0  |   |                           | $      | 371.3 |   |   | $ | 597.6 |   |   | $ | 799.2 |   |
|   Uranium                      |   |                                   | 69.6   |   |                           |   | 95.4 |   |   |   | 85.2 |   |   |   | 124.0 |   |
|                                |   |                                   | 400.6  |   |                           |   | 466.7 |   |   |   | 682.8 |   |   |   | 923.2 |   |
| U.S. government contracts segment   |   |                                   | 59.1   |   |                           |   | 47.6 |   |   |   | 121.6 |   |   |   | 96.7 |   |
|                                |   | $                                      | 459.7  |   |                           | $      | 514.3 |   |   | $ | 804.4 |   |   | $ | 1,019.9 |   |
|                                |   |                                   |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Segment Gross Profit                |   |                                   |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| LEU segment                         |   | $                                      | 42.0   |   |                           | $      | 74.8 |   |   | $ | 57.0 |   |   | $ | 116.4 |   |
| U.S. government contracts segment   |   |                                   | 2.1    |   |                           |   | 2.6 |   |   |   | 13.8 |   |   |   | 3.2 |   |
| Gross profit                        |   |                                   | 44.1   |   |                           |   | 77.4 |   |   |   | 70.8 |   |   |   | 119.6 |   |
| Advanced technology costs           |   |                                   | 26.0   |   |                           |   | 30.7 |   |   |   | 51.7 |   |   |   | 62.1 |   |
| Selling, general and administrative |   |                                   | 14.3   |   |                           |   | 16.6 |   |   |   | 29.4 |   |   |   | 31.1 |   |
| Other (income)                      |   |                                   | (10.3  | )      |                           |   | - |   |   |   | (20.0 | ) |   |   | - |   |
| Operating income                    |   |                                   | 14.1   |   |                           |   | 30.1 |   |   |   | 9.7 |   |   |   | 26.4 |   |
| Interest expense (income), net      |   |                                   | -      |   |                           |   | (0.1 | ) |   |   | (0.1 | ) |   |   | (0.2 | ) |
| Income before income taxes          |   | $                                      | 14.1   |   |                           | $      | 30.2 |   |   | $ | 9.8 |   |   | $ | 26.6 |   |

----

| ·   | supply LEU to both domestic and international utilities for use in about 150 nuclear reactors worldwide,  |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | are deploying what we anticipate will be the world’s most advanced uranium enrichment technology, known as the American Centrifuge,  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | are the exclusive executive agent for the U.S. government under a nuclear nonproliferation program with Russia, known as Megatons to Megawatts,  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | perform contract work for the U.S. Department of Energy (“DOE”) and its contractors at the Paducah and Portsmouth gaseous diffusion plants (“GDPs”), and  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | provide transportation and storage systems for spent nuclear fuel and provide nuclear and energy consulting services. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

----

| ·   | Completed a thorough quality assurance program review; |
|--------------------|--------------------------------------------------------|

| ·   | Worked with our strategic suppliers to build and operate more than 40 AC100 machines, which are the production-ready commercial centrifuge machines; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Assembled and operated AC100 machines configured for a multi-stage cascade that replicates anticipated commercial plant conditions; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gained substantial cascade operating experience, including maintenance and repairs in an operating environment; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Continued development work and value engineering to increase the machine’s productivity and lower its unit cost; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | Entered into an agreement for a strategic investment of $200 million by two leading companies in the nuclear industry; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | Produced detailed updates to project scope, cost and schedule based on close collaboration with our suppliers. |
|--------------------|----------------------------------------------------------------------------------------------------------------|

----

| ·   | Assembled, installed and operated production-ready AC100 machines in a commercial plant cascade configuration; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | Worked with our suppliers to manufacture additional AC100 machines; |
|--------------------|---------------------------------------------------------------------|

| ·   | Continued machine technology development in Oak Ridge in support of lead cascade testing, value engineering and increasing machine productivity; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Preserved our ability to remobilize plant construction by working with our engineering, procurement and construction contractor on the 80% complete plant design and conducting a detailed cost and schedule assessment for completing the commercial plant. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | Costs related to the demobilization and remobilization and costs associated with continued ACP activities prior to any remobilization period; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost increases as a result of additional design work and refined cost estimates from our suppliers related to machine manufacturing and engineering, procurement and construction (“EPC”) costs; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Costs related to the maturity of scope of the project. |
|--------------------|--------------------------------------------------------|

----

| ·   | sales of the SWU component of LEU, |
|--------------------|------------------------------------|

| ·   | sales of both the SWU and uranium components of LEU, and |
|--------------------|----------------------------------------------------------|

| ·   | sales of uranium. |
|--------------------|-------------------|

----

|                                                                                                                                                                                                                                                                                                                                                             | June 30,     | December 31, | June 30, |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------------|----------|
|                                                                                                                                                                                                                                                                                                                                                             | 2010         | 2009         | 2009     |
| Long-term SWU price indicator ($/SWU)                                                                                                                                                                                                                                                                                                                            | $160.00      | $165.00      | $165.00  |
| UF6:                                                                                                                                                                                                                                                                                                                                                             |         |         |     |
| Long-term price composite ($/KgU)                                                                                                                                                                                                                                                                                                                                |  168.27 | 167.77       | 182.09   |
| Spot price indicator ($/KgU)                                                       |  116.00 | 120.00       | 137.00   |

----

----

----

|                                                                                                                                                                                                                                                                                                                                  |   | Six Months Ended June 30, |   |   | Cumulativeas ofJune 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                  |   | 2010                           |   |   | 2009                    |   |   | 2010 |   |
| Amount expensed (A)                                                                                                                                                                                                                                                                                                              |   | $                              | 50.7   |   |                    | $      | 61.9 |   |   | $ | 710.3 |   |
| Amount capitalized (B)                                                                                                                                                                                                                                                                                                           |   |                           | 63.6   |   |                    |   | 228.0 |   |   |   | 1,111.9 |   |
| Total ACP expenditures, including accruals (C)                                                                                                                                                                                                                                                                                   |   | $                              | 114.3  |   |                    | $      | 289.9 |   |   | $ | 1,822.2 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                           |   |   |                    |   |   |   |   |   |   |   |
| (A)  Expense included as part of Advanced Technology Costs.                                                                                                                                                                                                                                                                      |   |
| (B)  Amounts capitalized as part of property, plant and equipment total $1,078.4 million as of June 30, 2010, including capitalized interest of $60.8 million. Prepayments to suppliers for services not yet performed totaled $33.5 million as of June 30, 2010.                                                                |   |
| (C)  Total ACP expenditures are all American Centrifuge costs including, but not limited to, demonstration facility, licensing activities, commercial plant facility, program management, interest related costs and accrued asset retirement obligations capitalized. This includes $11.9 million of accruals at June 30, 2010. |   |

----

----

|                              |   | Three Months Ended June 30, |   |   |   |   |   |   |   |
|-----------------------------------|--------|-----------------------------|--------|--------|--------|--------|--------|--------|--------|
|                              |   | 2010                        |   |   | 2009   |   |   | Change |   |   | % |   |
| LEU segment                       |   |                        |   |   |   |   |   |   |   |   |   |   |
| Revenue:                          |   |                        |   |   |   |   |   |   |   |   |   |   |
|    SWU revenue     |   | $                           | 331.0  |   |   | $      | 371.3  |   |   | $ | (40.3 | ) |   |   | (11 | )% |
| Uranium revenue                   |   |                        | 69.6   |   |   |   | 95.4   |   |   |   | (25.8 | ) |   |   | (27 | )% |
| Total                             |   |                        | 400.6  |   |   |   | 466.7  |   |   |   | (66.1 | ) |   |   | (14 | )% |
| Cost of sales                     |   |                        | 358.6  |   |   |   | 391.9  |   |   |   | 33.3 |   |   |   | 8 | % |
| Gross profit                      |   | $                           | 42.0   |   |   | $      | 74.8   |   |   | $ | (32.8 | ) |   |   | (44 | )% |
|                              |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government contracts segment |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                           |   | $                           | 59.1   |   |   | $      | 47.6   |   |   | $ | 11.5 |   |   |   | 24 | % |
| Cost of sales                     |   |                        | 57.0   |   |   |   | 45.0   |   |   |   | (12.0 | ) |   |   | (27 | )% |
| Gross profit                      |   | $                           | 2.1    |   |   | $      | 2.6    |   |   | $ | (0.5 | ) |   |   | (19 | )% |
|                              |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                             |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                           |   | $                           | 459.7  |   |   | $      | 514.3  |   |   | $ | (54.6 | ) |   |   | (11 | )% |
| Cost of sales                     |   |                        | 415.6  |   |   |   | 436.9  |   |   |   | 21.3 |   |   |   | 5 | % |
| Gross profit                      |   | $                           | 44.1   |   |   | $      | 77.4   |   |   | $ | (33.3 | ) |   |   | (43 | )% |

|                              |   | Six Months Ended June 30, |   |   |   |   |    |   |   |
|-----------------------------------|--------|---------------------------|--------|--------|--------|--------|---------|--------|--------|
|                              |   | 2010                      |   |   | 2009   |   |    | Change |   |   | % |   |
| LEU segment                       |   |                      |   |   |   |   |    |   |   |   |   |   |
| Revenue:                          |   |                      |   |   |   |   |    |   |   |   |   |   |
| SWU revenue                       |   | $                         | 597.6  |   |   | $      | 799.2   |   |   | $ | (201.6 | ) |   |   | (25 | )% |
| Uranium revenue                   |   |                      | 85.2   |   |   |   | 124.0   |   |   |   | (38.8 | ) |   |   | (31 | )% |
| Total                             |   |                      | 682.8  |   |   |   | 923.2   |   |   |   | (240.4 | ) |   |   | (26 | )% |
| Cost of sales                     |   |                      | 625.8  |   |   |   | 806.8   |   |   |   | 181.0 |   |   |   | 22 | % |
| Gross profit                      |   | $                         | 57.0   |   |   | $      | 116.4   |   |   | $ | (59.4 | ) |   |   | (51 | )% |
|                              |   |                      |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| U.S. government contracts segment |   |                      |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Revenue                           |   | $                         | 121.6  |   |   | $      | 96.7    |   |   | $ | 24.9 |   |   |   | 26 | % |
| Cost of sales                     |   |                      | 107.8  |   |   |   | 93.5    |   |   |   | (14.3 | ) |   |   | (15 | )% |
| Gross profit                      |   | $                         | 13.8   |   |   | $      | 3.2     |   |   | $ | 10.6 |   |   |   | 331 | % |
|                              |   |                      |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Total                             |   |                      |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Revenue                           |   | $                         | 804.4  |   |   | $      | 1,019.9 |   |   | $ | (215.5 | ) |   |   | (21 | )% |
| Cost of sales                     |   |                      | 733.6  |   |   |   | 900.3   |   |   |   | 166.7 |   |   |   | 19 | % |
| Gross profit                      |   | $                         | 70.8   |   |   | $      | 119.6   |   |   | $ | (48.8 | ) |   |   | (41 | )% |

----

----

----

|                                |   | Three Months Ended June 30, |   |   |   |   |   |   |   |
|-------------------------------------|--------|-----------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                |   | 2010                        |   |   | 2009   |   |   | Change |   |   | % |   |
| Gross profit                        |   | $                           | 44.1   |   |   | $      | 77.4   |   |   | $ | (33.3 | ) |   |   | (43 | )% |
| Advanced technology costs           |   |                        | 26.0   |   |   |   | 30.7   |   |   |   | 4.7 |   |   |   | 15 | % |
| Selling, general and administrative |   |                        | 14.3   |   |   |   | 16.6   |   |   |   | 2.3 |   |   |   | 14 | % |
| Other (income)                      |   |                        | (10.3  | )      |   |   | -      |   |   |   | 10.3 |   |   |   | - |   |
| Operating income                    |   |                        | 14.1   |   |   |   | 30.1   |   |   |   | (16.0 | ) |   |   | (53 | )% |
| Interest expense                    |   |                        | 0.1    |   |   |   | 0.3    |   |   |   | 0.2 |   |   |   | 67 | % |
| Interest (income)                   |   |                        | (0.1   | )      |   |   | (0.4   | )      |   |   | (0.3 | ) |   |   | (75 | )% |
| Income before income taxes          |   |                        | 14.1   |   |   |   | 30.2   |   |   |   | (16.1 | ) |   |   | (53 | )% |
| Provision for income taxes          |   |                        | 6.9    |   |   |   | 12.9   |   |   |   | 6.0 |   |   |   | 47 | % |
| Net income                          |   | $                           | 7.2    |   |   | $      | 17.3   |   |   | $ | (10.1 | ) |   |   | (58 | )% |

|                                |   | Six Months Ended June 30, |   |   |   |   |   |   |   |
|-------------------------------------|--------|---------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                |   | 2010                      |   |   | 2009   |   |   | Change |   |   | % |   |
| Gross profit                        |   | $                         | 70.8   |   |   | $      | 119.6  |   |   | $ | (48.8 | ) |   |   | (41 | )% |
| Advanced technology costs           |   |                      | 51.7   |   |   |   | 62.1   |   |   |   | 10.4 |   |   |   | 17 | % |
| Selling, general and administrative |   |                      | 29.4   |   |   |   | 31.1   |   |   |   | 1.7 |   |   |   | 5 | % |
| Other (income)                      |   |                      | (20.0  | )      |   |   | -      |   |   |   | 20.0 |   |   |   | - |   |
| Operating income                    |   |                      | 9.7    |   |   |   | 26.4   |   |   |   | (16.7 | ) |   |   | (63 | )% |
| Interest expense                    |   |                      | 0.1    |   |   |   | 0.8    |   |   |   | 0.7 |   |   |   | 88 | % |
| Interest (income)                   |   |                      | (0.2   | )      |   |   | (1.0   | )      |   |   | (0.8 | ) |   |   | (80 | )% |
| Income before income taxes          |   |                      | 9.8    |   |   |   | 26.6   |   |   |   | (16.8 | ) |   |   | (63 | )% |
| Provision for income taxes          |   |                      | 12.3   |   |   |   | 11.4   |   |   |   | (0.9 | ) |   |   | (8 | )% |
| Net income (loss)                   |   | $                         | (2.5   | )      |   | $      | 15.2   |   |   | $ | (17.7 | ) |   |   | (116 | )% |

----

----

----

| ·   | Changes to the electric power fuel cost adjustment from our current projection; |
|--------------------|---------------------------------------------------------------------------------|

| ·   | The timing of recognition of previously deferred revenue, particularly related to the sale of uranium; |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | Ability to expand the existing credit facility or otherwise raise capital for investment in the ACP; |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | Changes to planned spending on the ACP; |
|--------------------|-----------------------------------------|

| ·   | Movement and timing of customer orders; |
|--------------------|-----------------------------------------|

| ·   | Changes to SWU and uranium price indicators, and changes in inflation that can affect the price of SWU billed to customers; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | Economics of underfeeding the production process at the Paducah GDP to make additional uranium sales; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | Actions taken by governmental bodies or agencies. |
|--------------------|---------------------------------------------------|

----

----

----

----

|                                                 |   | Six Months Ended June 30, |   |
|------------------------------------------------------|--------|---------------------------|--------|
|                                                 |   | 2010                      |   |   | 2009 |   |
| Net Cash Provided by (Used in) Operating Activities  |   | $                         | 173.2  |   |   | $ | 221.7 |   |
| Net Cash (Used in) Investing Activities              |   |                      | (84.9  | ) |   |   | (296.0 | ) |
| Net Cash (Used in) Financing Activities              |   |                      | (12.1  | ) |   |   | (96.5 | ) |
| Net Increase (Decrease) in Cash and Cash Equivalents |   | $                         | 76.2   |   |   | $ | (170.8 | ) |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June 30,   |   |   | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2010       |   |   | 2009         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | (millions) |   |
| Cash and cash equivalents                                                                                        |   | $          | 207.5  |   |         | $      | 131.3 |   |
| Accounts receivable, net                                                                                         |   |       | 121.1  |   |         |   | 191.4 |   |
| Inventories, net                                                                                                 |   |       | 787.5  |   |         |   | 831.8 |   |
| Other current assets and liabilities, net                                                                        |   |       | (308.2 | )      |         |   | (267.5 | ) |
| Working capital                                                                                                                 |   | $          | 807.9  |   |         | $      | 887.0 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                          | June 30,   | December 31,         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2010       | 2009                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                          | (millions) |
| Short-term borrowings                                                                     | $ -        |  $  - |
| Letters of credit                                                                         | 37.9       | 45.4                 |
| Available credit                                                                          | 187.1      | 295.5                |

----

|   | · | the sum of (1) the greater of a) the JPMorgan Chase Bank prime rate, b) the federal funds rate plus 1⁄2 of 1%, or c) 1-month LIBOR plus 1%  plus (2) a margin ranging from 2.25% to 2.75% based upon availability, or |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the sum of LIBOR plus a margin ranging from 4.0% to 4.5% based upon availability. |
|--------|--------|-----------------------------------------------------------------------------------|

----

----

|   | • | commodity price risk for electric power requirements for the Paducah GDP (refer to “Overview – Cost of Sales” and “Results of Operations – Cost of Sales”), and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | interest rate risk relating to any outstanding borrowings at variable interest rates under our revolving credit agreement (refer to “Liquidity and Capital Resources – Capital Structure and Financial Resources”). |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Completing our review of our quality assurance program and implementing corrective actions as needed; |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | Startup and operations of the AC100 lead cascade testing program in early 2010 using upgraded production machines to improve DOE’s confidence in the machines’ reliability through consistent operation; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Maintaining and demonstrating centrifuge machine manufacturing capability; and |
|--------------------|--------------------------------------------------------------------------------|

| ·   | Establishing a revised baseline cost and schedule for the project, taking into account the demobilization and remobilization costs and associated delays.  |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | We have incurred and will incur significant costs and expenses relating to the Transactions, whether or not the Transactions are completed; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Matters relating to the Transactions require substantial commitments of time and resources by our management, whether or not the Transactions are completed, which could otherwise have been devoted to other opportunities that may have been beneficial to us, including pursuing other strategic options or sources of capital; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The first closing of the Transactions is targeted for the third quarter of 2010, although such closing remains subject to several conditions.  The securities purchase agreement may be terminated by any party if the first closing does not occur by December 31, 2010.  If the first closing is not consummated in the near term, our ability to continue to spend on the American Centrifuge project will be limited and our anticipated sources of near term liquidity could be affected;  |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our loan guarantee application includes the $200 million investment as part of the sources of funds for the American Centrifuge project.  The strategic investment was also intended in part to address financial concerns of the DOE with respect to the ability of the American Centrifuge project to mitigate cost and other risk.  If the Transactions are not consummated or are delayed significantly, this would adversely affect our ability to obtain a loan guarantee (which is a condition to the third closing); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We need significant additional financing to complete construction of the American Centrifuge Plant beyond the DOE loan guarantee and the proceeds of the Transactions, and we will need to demonstrate the availability of that funding in order to obtain the DOE loan guarantee (which is a condition of the third closing).  We have initiated discussions with Japanese export credit agencies (ECAs) for additional financing.  Our ability to obtain Japanese ECA financing is highly dependent on the strategic investment by Toshiba. If the Transactions are not consummated or are delayed significantly and our ability to obtain Japanese ECA financing is adversely affected, this will subsequently adversely affect our ability to obtain a DOE loan guarantee, consummate the third closing and complete the American Centrifuge project;  and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | If the Transactions are not consummated, we may be unable to raise capital from alternative sources on terms favorable to us, if at all.  If the Transactions are not consummated or are delayed significantly and we are unable to raise capital from alternative sources, our business and prospects (including the American Centrifuge project) may be substantially harmed and our stock price may decline. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | Success in potential efforts to sell our low enriched uranium in connection with Toshiba’s nuclear power plant proposals, including Toshiba’s success in nuclear reactor sales; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Success of efforts to identify potential growth opportunities in U.S. government services, spent nuclear fuel transportation and storage, manufacturing of spent fuel storage systems; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our success in achieving cost savings and other benefits through the manufacturing joint venture with B&W.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

|   |                |                                                                                                                                                                                                               |
|--------|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  •  | our ability to get loan guarantees or other support from the U.S. government,                                                                                                                            |
|   |  •  | our ability to meet the closing conditions of each of the three phases of the $200 million strategic transaction with Toshiba and B&W and to otherwise address the financial concerns identified by DOE,  |
|   |  •  | the success of any discussions with Japanese export credit agencies regarding financing for the American Centrifuge project, including our dependency on Toshiba’s support for these discussions,       |
|   |  •  | the success of our demonstration of the American Centrifuge technology and our ability to address the technical concerns and risks identified by DOE,                                                         |
|   |  •  | the estimated costs, efficiency, timing and return on investment of the deployment of the American Centrifuge Plant (described below),                                                                        |
|   |  •  | our ability to secure a sufficient number of long-term SWU purchase commitments from customers on satisfactory terms, including adequate prices,                                                              |
|   |  •  | the level of success of our current operations,                                                                                                                                                               |
|   |  •  | SWU prices,                                                                                                                                                                                                   |
|   |  •  | USEC’s perceived competitive position and investor confidence in our industry and in us,                                                                                                                |
|   |  •  | projected costs for the disposal of depleted uranium and the decontamination and decommissioning of the American Centrifuge Plant, and the impact of related financial assurance requirements,                |
|   |  •  | additional downgrades in our credit rating,                                                                                                                                                                   |
|   |  •  | market price and volatility of our common stock,                                                                                                                                                              |
|   |  •  | general economic and capital market conditions,                                                                                                                                                               |
|   |  •  | conditions in energy markets,                                                                                                                                                                                 |
|   |  •  | regulatory developments,                                                                                                                                                                                      |
|   |  •  | our reliance on LEU delivered to us under the Russian Contract and uncertainty regarding prices and deliveries under the Russian Contract, and                                                                |
|   |  •  | restrictive covenants in the agreements governing our revolving credit facility and in our outstanding notes and any future financing arrangements that limit our operating and financial flexibility.        |

----

----

| ·   | November 2010 – Secure firm financing commitment(s) for the construction of the commercial American Centrifuge Plant with an annual capacity of approximately 3.5 million SWU per year (the “Financing Milestone”); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | August 2010 – begin commercial American Centrifuge Plant operations; |
|--------------------|----------------------------------------------------------------------------|

| ·   | November 2011 – commercial American Centrifuge Plant annual capacity at 1 million SWU per year; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | May 2013 – commercial American Centrifuge Plant annual capacity of approximately 3.5 million SWU per year. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

----

----

|                     |   |         |   |       |   | (c) Total Number     |   | (d) Maximum Number     |
|--------------------------|--------|--------------|--------|------------|--------|----------------------|--------|------------------------|
|                     |   | (a) Total    |   | (b)        |   | of Shares (or Units) |   | (or Approximate Dollar |
|                     |   | Number of    |   | Average    |   | Purchased as Part    |   | Value) of Shares (or   |
|                     |   | Shares (or   |   | Price Paid |   | of Publicly          |   | Units) that May Yet Be |
|                     |   | Units)       |   | Per Share  |   | Announced Plans      |   | Purchased Under the    |
|  Period             |   | Purchased(1) |   | (or Unit)  |   | or Programs          |   | Plans or Programs      |
|                     |   |         |   |       |   |                 |   |                   |
| April 1 – April 30 |   | 3,414        |   | $6.11      |   | -                    |   | -                      |
| May 1 – May 31     |   | 2,669        |   | $4.40      |   | -                    |   | -                      |
| June 1 – June 30   |   | 3,183        |   | $5.60      |   | -                    |   | -                      |
|    Total  |   | 9,266        |   | $5.44      |   | -                    |   | -                      |

| (1) | These purchases were not made pursuant to a publicly announced repurchase plan or program. Represents 9,266 shares of common stock surrendered to USEC to pay withholding taxes on shares of restricted stock under the Company’s equity incentive plan.   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.1 | Amended and Restated Bylaws of USEC Inc., dated May 25, 2010, incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | First Amendment dated May 25, 2010, to Rights Agreement dated April 24, 2001, between USEC Inc. and Mellon Investor Services LLC, as Rights Agent, incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | Securities Purchase Agreement, dated as of May 25, 2010, by and among USEC Inc., Toshiba Corporation, and Babcock & Wilcox Investment Company, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Summary Sheet for 2010 Non-Employee Director Compensation. |
|--------|------|------------------------------------------------------------|

|   | 10.3 | Power Contract between Tennessee Valley Authority and United States Enrichment Corporation, dated July 11, 2000 (Includes information previously omitted and filed separately pursuant to confidential treatment under Rule 24b-2). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | First Amendment, dated June 28, 2010, to the USEC Inc. Executive Deferred Compensation Plan, dated November 1, 2007. |
|--------|------|----------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). |
|--------|------|------------------------------------------------------------------------------------|

|   | 31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). |
|--------|------|------------------------------------------------------------------------------------|

|   | 32 | Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350. |
|--------|----|------------------------------------------------------------------|

|   | 101.INS | XBRL Instance Document |
|--------|---------|------------------------|

|   | 101.SCH | XBRL Taxonomy Extension Schema Document |
|--------|---------|-----------------------------------------|

|   | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
|--------|---------|-------------------------------------------------------|

|   | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
|--------|---------|-------------------------------------------------|

|   | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
|--------|---------|--------------------------------------------------------|

----

|           | USEC Inc.                                         |
|----------------|---------------------------------------------------|
|           |                                              |   |   |
|           |                                              |   |   |
|           |                                              |   |   |
| August 4, 2010 | By:                                               | /s/ John C. Barpoulis |   |
|           |                                              | John C. Barpoulis |   |
|           | Senior Vice President and Chief Financial Officer |
|           | (Principal Financial Officer)                     |

----

| 3.1 | Amended and Restated Bylaws of USEC Inc., dated May 25, 2010, incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | First Amendment dated May 25, 2010, to Rights Agreement dated April 24, 2001, between USEC Inc. and Mellon Investor Services LLC, as Rights Agent, incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Securities Purchase Agreement, dated as of May 25, 2010, by and among USEC Inc., Toshiba Corporation, and Babcock & Wilcox Investment Company, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Summary Sheet for 2010 Non-Employee Director Compensation. |
|------|------------------------------------------------------------|

| 10.3 | Power Contract between Tennessee Valley Authority and United States Enrichment Corporation, dated July 11, 2000 (Includes information previously omitted and filed separately pursuant to confidential treatment under Rule 24b-2). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | First Amendment, dated June 28, 2010, to the USEC Inc. Executive Deferred Compensation Plan, dated November 1, 2007. |
|------|----------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). |
|------|------------------------------------------------------------------------------------|

| 31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). |
|------|------------------------------------------------------------------------------------|

| 32 | Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350. |
|----|------------------------------------------------------------------|

| 101.INS | XBRL Instance Document |
|---------|------------------------|

| 101.SCH | XBRL Taxonomy Extension Schema Document |
|---------|-----------------------------------------|

| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
|---------|-------------------------------------------------------|

| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
|---------|-------------------------------------------------|

| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
|---------|--------------------------------------------------------|

----